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How to Choose the Best Location for Your Short-Term Rental Property

With tourism booming after the peak of the COVID-19 pandemic, many short-term rentals are going back to business. Regardless, one thing never changed: the importance of a vacation rental property’s location.

How to Choose the Best Location for Your Short-Term Rental Property

A prime location is essential to the success of any short-term rental business. It has a higher chance of attracting guests from all over the world just by being located in a destination hotspot. Likewise, a poorly-situated rental property investment could easily flop because tourists usually do not want to book a property that will cause them a lot of hassle going in and out.

But with so many locations available in the real estate world, how can you know which is the best spot for a short-term rental property investment? In this article, you’re about to find out.

Rental Property Investment: Choosing the Best Location

1. Consider Nearby Attractions

When deciding where to purchase a short-term rental property, you should never overlook the local attractions. This can help improve the location's appeal to potential visitors.

There may be a stronger demand for real estate in areas close to tourist attractions and events. A rental home near a major city's thriving events or museums could attract many prospective tenants. Short-term rentals near tourist hotspots, such as beaches, camping sites, and resorts, are likely to be in demand.

2. Make Sure that there are Nearby Establishments

A short-term rental that is far from useful establishments is up to no good. Try to find a city or neighborhood that has lots of parks, stores, and restaurants that would interest tenants.

For instance, choose a location that has nearby entertainment facilities, such as concert halls, movie theaters, and parks. It is also best to choose a neighborhood that has hospitals and other medical institutions close by. Having these in the area of the rental property investment you're considering indicates high demand.

3. Check Area Profitability

Investors in the short-term rental market understand the high stakes involved. Real estate price increases or decreases are completely unpredictable. When you put your life savings into a property in the hopes of making a profit, the stakes couldn't be higher.

However, this could be minimized. You can estimate the potential profitability of a rental investment by looking at statistics and Techvestor data on rental demand in the area. Average nightly costs and occupancy rates can be found using online resources. Short-term rentals are in high demand in many popular travel destinations and towns with robust job markets.

4. Observe the Area’s Market Trends

The best way to determine the location where you can make the most money out of your rental property investment is to look at purchasing patterns. Is this a well-liked part of town? Is buying real estate property common there? What's happening to real estate prices? The proper choice can be made with the use of such data regarding a given area.

Look for indications that property values in the neighborhood are rising as you make your decision. Consider the cash flow of similar short-term rental properties in the neighborhood to see if this is a good long-term investment option for you. A rental property with high cash flow and low vacancy rates is a great long-term investment.

5. Ensuring How Safe the Neighborhood Is

There are many ways to find out if a neighborhood is safe. One choice is to find out how often crimes happen in the area of the short-term rental property. This information can be found online or by calling the local police department.

Spending time in a neighborhood is another way to see how safe it is. Look for streets that are well-lit. Law enforcement that is easy to see adds a general sense of safety. You can also talk to people who live there to find out what they think about how safe the area is.

By making sure the neighborhood is safe, you can make sure your property is in a safe place. This makes sure your guests don't worry about anything and have peace of mind while staying in your rental property investment.

6. Research on State Property Laws and Taxes

When you make an investment for your short-term rental, you also need to find out what the tax laws and regulations are in the city where your property is situated. There are some places where real estate taxes could be significantly higher compared to other cities. Do a lot of research before you decide where the best place to buy property is.

Check if there are any rules about how much a rental unit can cost when deciding where to buy a home. Find out what the regulations are for buying and selling property in the area. Before you put your hard-earned funds into the rental property investment sector, you should also look into the different forms of property tax payments in the city.

7. Examine Public Transportation Accessibility

Having access to reliable public transit should be high on your list of priorities when selecting a neighborhood in which to buy a short-term rental property. If people from all around the city can get there quickly and conveniently, that's a plus for travelers and potential customers.

City centers, numerous commercial and residential regions, and nearby cities and towns are all easily accessible thanks to reliable public transportation and convenient transportation hubs. Those who need easy access to shopping, dining, and entertainment establishments, as well as those who commute to go around the city, will appreciate this feature.

Rental property investment values would rise as a result, and after new roads are built and public transportation choices are expanded, you could resell your home and pocket the difference.


If you put in the time and effort required, you can locate an area with a strong rental market and generate cash flow from your rental property investment. There are a lot of things to consider when choosing a location for your desired short-term rental.

From the safety of the neighborhood to nearby tourist attractions, there will surely be a reason for you to want to pick a certain location. Make sure to check most, if not all, of the tips listed above before entering the real estate market.